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In late January, Saturday Night Live guest Kevin Hart completed the trio of "Bushwick Boys" whose four-minute corner chat about changing neighborhood dynamics included, among other things, gluten-free muffins, $8 artisan mayonnaise, and cheese and wine pairings. If you haven't seen it, do yourself a favor and give it a watch.

I was pleased, if somewhat surprised, to note that mayo has become the new reference point for overpriced "gourmet" food. For the last decade it's been "artisan cheese."

Why, people ask me, is cheese so expensive? And why does local American cheese often cost more than cheese from Europe? Until today my answer has been limited to an accurate, if unsatisfying explanation that a pound of cheese is actually a lot of food—an appropriate amount for feeding eight to 16 people (assuming they each eat one to two ounces). Most of the time we're shopping for four to six, so we're not buying a $30 pound of cheese. We're buying, say, a $10 third-pound.

While thinking about cheese pricing in terms of real cost helps lessen sticker shock, it doesn't get to the heart of question. It also doesn't address that our cheese (and the milk used to make it) may actually be too cheap. How is that the case? It all comes down to multiplication.

The Cost of Milk

All cheese begins with milk, and milk is a commodity—its price is part market-determined and part publicly administered through a wide variety of pricing regulations. While milk prices fluctuate by season and year, it's not uncommon for the price of milk (what a dairy farmer can sell their milk for) to be less than the cost of producing that milk.

That's a problem for small family farms that lack the cash reserves to ride out market fluctuations. Between 1998 and 2007, the number of New York state dairy farms (the country's third leading producer of dairy products) plummeted 27%. In the past 20 years the state has lost half of its dairy farms, and the farms that remain tend to be larger-scale.

Any cheesemaker who buys commodity milk on the open market, regardless of the size, scale, or efficiency of his creamery, pays the same set price. Many smaller production cheesemakers choose to pay their milk suppliers a premium price for higher quality milk. "Higher quality" might mean cleaner milk (with lower somatic counts, for instance), or higher fat and protein content, or milk from a less efficient breed of cow, all depending on the flavor and texture the maker wants to elicit. If you want grass-fed or organic milk, expect to pay a premium for that as well.

Cheesemakers who produce their own milk (often called farmstead producers) face the added cost of refining a raw product. Andy Hatch, the co-owner and cheesemaker of Dodgeville Wisconsin's Uplands Cheese, gave an example.

Uplands produces milk for cheese seasonally, only when the cows are outside eating grass. Their breeds of choice were selected for the cows' abilities to walk, eat grass, and produce exceptionally flavorful milk. Uplands gets 50 pounds of milk, per cow, per day. The modern Holstein dairy cow, confined to a barn and eating a grain-based energy-intensive diet, will give you double that—100 pounds per cow per day. Before a drop of milk hits the cheesemaking vat, Uplands' raw material is twice as expensive as commodity milk because there is half as much.

The Cost of Transformation

How much it costs to turn milk into cheese depends on your efficiency of scale. The standard cheesemaking vat at a Wisconsin cheese plant holds 40,000 pounds of milk. Uplands' vat holds 9,000 pounds, and most handmade cheeses I know are produced in vats less than half that size. Smaller batches mean more time and higher labor costs to process the same amount of cheese—a less efficient operation. Larger cheesemaking operations also benefit from precise but costly production machines that smaller makers can't afford.

So the cost of turning Uplands' milk, which costs twice that of commodity prices already, is multiplied further by a less efficient production process. That's difficult enough, but there's an even greater cost to come: aging.

The Cost of Time

Aging cheese is expensive, which is why many small production dairies start out with a fresh or briefly aged cheese. Milk it, make it, sell it and collect cash immediately.

If you're aging cheese, your cash is tied up every day that wheel or block sits on the shelf. But the type of aging determines how costly that time will be. The cheapest cheeses you can find—rindless blocks of cheddar or jack—are made, packaged in airtight plastic Cryovac, and put away in refrigerated warehouses. The costs of aging these cheeses are typically three cents per pound, enough to cover the electricity of basic light and climate control.

"Cave-aged," "cellar-ripened," or "natural-rinded" cheeses must age in open air conditions. They are turned, flipped, brushed, and possibly washed. They are handled with considerable care and expertise. And they may lose up to 10 to 12% of their weight as they age.

It costs three times as much to age a cheese like Uplands' award-winning Pleasant Ridge Reserve. A ten-pound wheel requires $3 a month in carrying costs. As Andy says, "We don't ripen it that way because it's nostalgic or good for marketing. It's the best way we know to develop that kind of flavor complexity."

Supporting Tradition

Like Uplands, many American cheesemakers choose traditional methods in their quest for finer cheese. Many of these traditions hail from Europe, and in EU countries today cheesemakers receive financial support from the government to produce cheese the old fashioned way. On a recent trip to Switzerland I admired the meticulously maintained open pastures surrounding remote alpage Gruyere producers, when someone casually mentioned that the Swiss government paid a subsidy per acre to farmers to maintain that land.

Some European cheesemakers receive up to 40% of their income as a direct subsidy from the EU. This may be paid by animal or by acre, but in all cases there is an understanding that traditional farming is important to maintain, and small farmers require financial assistance to compete in the world market. In the US, there's no such support.

The Supply Chain

Finally, there's the cost of getting a cheese to market. After it leaves a maker, a cheese typically goes to a distributor who in turn sells it to a retailer. Together, these links in the chain add a gross markup of 45 to 70% on top of the cost paid to the cheesemaker. It's not unusual to pay $30 a pound for a cheese whose maker received $12 a pound.

Each of these costs is tough to manage on their own. But they also multiply on top of each other. That twice-as-expensive milk becomes even more expensive to manufacture in traditional ways, then gets multiplied by another factor of three for aging, then even more for distribution and markup.